In a recent tweet, Attorney John Deaton revealed that the U.S. Securities and Exchange Commission (SEC) is pursuing a hefty $770 million “Worth of Flesh” from Ripple just days after dropping charges.
According to Deaton, this amount represents the total value of XRP sold by Ripple to institutional investors, with the regulator claiming these sales violated federal securities laws.
This demand comes as both parties prepare for the remedies phase of the case, during which penalties will be decided.
However, Deaton speculated that Ripple would take steps to reduce the $770 million penalty through exclusions for things like On-Demand Liquidity sales of XRP, salaries, and other business expenses. Deaton believes that Ripple could spend millions fighting the SEC’s demand.
Deaton also pointed out a similar situation in the LBRY case. where the SEC’s demands were successfully reduced during the remedies phase of the lawsuit. Initially, the SEC sought $23 million in penalties but later settled for a more modest $130,000 after eight months of legal proceedings.
The Attorney also raised the possibility of a settlement in the case, with the outcome of the SEC vs. Coinbase lawsuit potentially influencing negotiations with Ripple.
Early this year, the SEC sued Coinbase for violating securities laws and operating an unregistered national securities exchange. In response, Coinbase has filed a motion to dismiss these charges.
Deaton theorized that if Coinbase succeeds in having the charges dismissed, it might prompt the SEC to reconsider its stance on cryptocurrencies, potentially opening the door for negotiations with Ripple.
However, he cautioned that if Coinbase were to lose the case, the prospects for a Ripple settlement might become less likely.
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